Purpose supports the means in value-based businesses

Articol de: Florentina Șușnea, Managing Partner, PKF Finconta

Today everything is happening in the network. The
interconnections between its nodes increase exponentially to the benefit of
those who make it. Companies interested only to thank their shareholders miss
the opportunity to connect to the network. The shareholders are just a node –
the network is also made up of employees, consumers, suppliers, the environment
and the entire community. Therefore, the company must take into account the
aspirations of all stakeholders, beyond direct investors.

The principle that for a company its own interests should
go beyond the immediate profit goal, for the benefit of a higher purpose, is
very debated. After overcoming the scoping stage as an aspiration to inspire
and call for action, now companies are entering the stage of defining the goal
according to a wider conception.

It is man-centered, and the company becomes socially
committed to the goal, which aims to create value for many stakeholders. While
many organizations seek to identify their values and purpose, to clarify the
theme, I propose to define this new and deeper articulation of intent the
following five points of analysis:

Trust
– Recovering
confidence in the corporate values of all stakeholders is rather a difficult
task. The propagation of the effects of big scandals has strongly hit this reference
currency for any human interaction. Young generations believe less and less in
goodwill and in the values underpinning management decisions, in any case much
less than previous generations. In the perception of this new generation,
welfare distribution and equal opportunities are affected by certain decisions
of those who are the guardians of an outdated world.

Sustainability
– Climate
change is currently on the social agenda and has brought companies under public
scrutiny and regulation of their impact on the environment. Public pressure
forces their management to reassess how they produce, consume and deliver goods
and services according to social and environmental criteria.

Social
equity – Global
economy is growing and, together with it, social inequality. More than 50% of
the global wealth is owned by 1% of the population. The pay gap between company
employees in different parts of the world is also rising. Consequence? Increasing
the frequency of nationalist proclivities at the level of public discourse,
societies that are increasingly less resistant to nationalistic tendencies and
intolerance towards the ones different.

Long-term
thinking –
Stakeholders are now forcing companies not to confine themselves to short-term
profitability. In the view of the many, companies have an obligation to address
global environmental and social challenges in the long run. Despite many
short-term pressures, directors are also trying to take into account some of
the long-term consequences, aware that the real value of a company is linked to
brand, employee, and intellectual capital.

Digitization
– Instant
connection between stakeholders and the increasing power of real-time data
analysis make it possible for companies to know and better serve the consumer.
These transformations will rebalance the game power, due to new ways in which
customers signal any gap between a company’s image and its actions.

These five forces show that many employees, customers, investors, communities and other stakeholders are deeply questioned about the role of companies in their communities. While change is an immutable feature of life and business, technology and science accelerate the pace and scale of change more than ever. Understanding the main purpose of an organization’s existence by correlating with the evolution of the world is a constructive way to address growth.

Today everything is happening in the network. The interconnections between its nodes increase exponentially to the benefit of those who make it. Companies interested only to thank their shareholders miss the opportunity to connect to the network. The shareholders are just a node – the network is also made up of employees, consumers, suppliers, the environment and the entire community. Therefore, the company must take into account the aspirations of all stakeholders, beyond direct investors.